Grim news from Qantas – fares to increase 3.5%

QantasQantas is planning to hike its base fares by around 3.5% for domestic fares and 3% for international fares from May 9. It’s Jetstar subsidiary is ‘reviewing’ its fares, and is reportedly likely to (wait for it) increase fares, particularly on international routes.

I’m glad to see an increase to base fares rather than (competition distorting, consumer misleading) fare surcharges but I’m somewhat put out by Qantas big-wig Geoff Dixon’s reasoning. Apparently, the airline will increase the base price, rather than its fuel surcharge, ‘to bridge the widening gap between the actual cost of fuel and the amount that gets offset through surcharges and non-cost fuel improvements’. I’d appreciate if someone could explain that to me in a loud, slow voice.

If it’s any consolation – and its not – Qantas is also suspending its share buy-back program and ‘making cutbacks to ”non-essential” expenditure and instituting a hiring freeze to minimise the impact of the surging jet fuel prices’.

Virgin Blue is set also to increase fares $12 per sector from next month.

Both airlines blame the increases on fairies going on strike at the bottom of the garden. Or rising fuel prices.

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[Image from pbo31on Flickr]

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